Binhai Investment Co (2886) AI Stock Analysis

• Market Cap: HK$1.55B
• Dividend Yield: 6.91%
• Average Volume (3M): 166.83K
• Price to Earnings (P/E): 7.4
• Beta (1Y): 0.44
• Revenue Growth: -16.94%
• EPS Growth: -22.17%
• Country: HK
• Employees: 1,746
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Gas
• EPS (TTM): 0.13
• Shares Outstanding: 1,383,255,100
• 10 Day Avg. Volume: 129,040
• 30 Day Avg. Volume: 166,826
• PEG Ratio: -0.37
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.25
• P/FCF Ratio: 7.28
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: HK$1.00 ▼(-10.71% Downside)

The overall stock score of 67 reflects a balance between stable financial performance and attractive valuation, offset by weak technical indicators. The company's profitability and cash flow generation are strong, but high leverage and declining margins pose risks. The stock's low P/E ratio and high dividend yield suggest it may be undervalued, providing a potential opportunity for income-focused investors. However, bearish technical signals indicate caution in the short term.

Positive Factors

Strategic Partnerships

The strategic partnership with Tianjin Institute enhances Binhai's technical capabilities and competitiveness in the clean energy sector, supporting long-term growth and innovation.

Favorable Financing

The favorable loan terms from Agricultural Bank of China improve Binhai's financial flexibility, supporting sustainable development and reducing financing costs.

Governance Structure

The establishment of key committees enhances operational oversight and strategic decision-making, strengthening Binhai's governance and industry position.

Negative Factors

Revenue Decline

The decline in revenue growth indicates challenges in market expansion and customer acquisition, potentially impacting long-term profitability.

Margin Pressure

Decreasing margins suggest cost pressures and pricing challenges, which could hinder Binhai's ability to sustain profitability over time.

High Leverage

High leverage increases financial risk and limits flexibility, potentially affecting Binhai's ability to invest in growth opportunities.

Binhai Investment Co Business Overview & Revenue Model

Company Description

Binhai Investment Company Limited, an investment holding company, engages in the construction of gas pipeline networks, provision of connection services, and sale of liquefied petroleum gas (LPG) and piped natural gas in Hong Kong. The company operates through Sales of Piped Natural Gas, Construction and Gas Pipeline Installation Service, Gas Passing through Service, and Sales of Bottled Natural Gas segments. It also sells piped and bottled natural gas through its pipeline networks to residential and industrial users. In addition, the company constructs gas pipelines, as well as offers construction and gas pipeline installation services to industrial and commercial customers, property developers, and property management companies. As of December 31, 2021, it had a gas pipeline network of approximately 3,574 kilometers. The company also engages in property development business. The company was founded in 1994 and is headquartered in Causeway Bay, Hong Kong.

How the Company Makes Money

Binhai Investment Co generates revenue primarily through its investments in real estate and infrastructure projects, earning returns from rental income, property appreciation, and project completion. The company also engages in financial services, such as asset management and advisory services, which contribute to its revenue streams. Key partnerships with local governments and private sector entities enhance its project acquisition capabilities and expand its investment portfolio. Additionally, the firm may benefit from performance-based fees associated with its asset management services, providing a consistent income flow.

Binhai Investment Co Financial Statement Overview

Summary

Binhai Investment Co shows stable financial performance with consistent profitability, although there are pressures on revenue and margins. High leverage poses some risk, but the company maintains a solid equity base. Cash flow generation is strong, though slightly declining. Overall, the company is well-positioned but faces challenges in revenue growth and margin pressures.

Income Statement

Revenue growth has been inconsistent, with a decline of 3.26% in 2024 compared to 2023. Gross profit margin decreased from 11.69% to 9.18%, and net profit margin decreased from 4.01% to 3.22%. EBIT and EBITDA margins also experienced a decline. These metrics indicate some pressure on profitability, although the company remains consistently profitable.

Balance Sheet

The debt-to-equity ratio remained high at 1.50 in 2024, indicating significant leverage. Return on equity decreased slightly to 8.99%, reflecting reduced profitability. The equity ratio remained stable at 28.66%, suggesting adequate equity financing relative to assets.

Cash Flow

Free cash flow declined by 13.62% from 2023 to 2024, reflecting reduced cash generation. Operating cash flow to net income ratio improved to 2.98, indicating strong cash generation relative to profit. Free cash flow to net income ratio remained stable at 1.07, showing effective cash conversion from profits.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.63B	6.20B	6.41B	6.10B	4.84B	3.65B
Gross Profit	559.92M	569.48M	748.98M	727.32M	855.44M	603.41M
EBITDA	546.76M	612.73M	728.45M	699.62M	781.95M	709.57M
Net Income	204.67M	199.78M	256.61M	325.83M	399.66M	354.90M
Balance Sheet
Total Assets	8.00B	7.75B	8.59B	8.57B	8.18B	7.09B
Cash, Cash Equivalents and Short-Term Investments	360.77M	385.00M	935.40M	845.25M	742.18M	589.77M
Total Debt	3.72B	3.34B	3.92B	3.93B	3.15B	2.38B
Total Liabilities	5.60B	5.45B	6.27B	6.28B	5.86B	5.10B
Stockholders Equity	2.33B	2.22B	2.23B	2.22B	2.25B	1.94B
Cash Flow
Free Cash Flow	243.80M	216.24M	246.87M	-285.59M	-224.78M	-97.08M
Operating Cash Flow	539.66M	594.99M	832.38M	350.25M	486.15M	772.30M
Investing Cash Flow	-265.75M	-213.40M	-586.86M	-802.42M	-613.39M	-972.35M
Financing Cash Flow	-612.93M	-780.61M	-252.55M	617.13M	444.82M	-113.41M

Binhai Investment Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2886, the sentiment is Negative. The current price of 1.12 is above the 20-day moving average (MA) of 1.11, above the 50-day MA of 1.10, and above the 200-day MA of 1.08, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 47.41 is Neutral, neither overbought nor oversold. The STOCH value of 61.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2886.

Binhai Investment Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2886	67 Neutral	HK$1.55B	7.41	8.96%	6.91%	-16.94%	-22.17%
9908	66 Neutral	HK$1.13B	6.02	15.50%	5.30%	3.23%	2.73%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
0681	62 Neutral	HK$303.78M	7.91	1.42%	―	-3.63%	―
1600	59 Neutral	HK$3.04B	9.87	4.88%	4.94%	7.55%	-32.06%
1265	49 Neutral	HK$327.40M	-5.77	-3.93%	―	-11.42%	65.17%
6828	48 Neutral	HK$750.29M	8.95	6.00%	―	4.42%	-24.00%

Binhai Investment Co Corporate Events

Binhai Investment Co Announces Connected Transaction for Engineering Services

Binhai Investment Co has announced that its wholly-owned subsidiary, TEDA Clean Energy, has entered into a Magnetic Gradient Detection Service Agreement with TEDA Jianan, an indirect non-wholly owned subsidiary of TEDA. This agreement involves TEDA Jianan providing engineering surveying services to locate gas pipelines for the Huaihe East Road Project. The transaction is classified as a connected transaction under Hong Kong’s Listing Rules due to TEDA’s significant shareholding in Binhai Investment Co. The agreement is subject to reporting and announcement requirements but is exempt from shareholder approval.

Binhai Investment Co Partners with Zhejiang Taineng for Integrated Energy Projects

Binhai Investment Co has entered into a strategic cooperation agreement with Zhejiang Taineng Smart Power Co to collaborate on integrated energy projects across China. This partnership aims to leverage both companies’ strengths in zero-carbon park development, smart micro-grids, and energy storage, enhancing their market influence and technical capabilities. The collaboration will also explore equity cooperation and resource sharing, potentially increasing their market share and brand impact.

Binhai Investment Secures Major Gas Supply Project with Zhaoyuan Thermal Power Plant

Binhai Investment Company Limited announced that its subsidiary, Zhaoyuan Binhai Gas Company Limited, has secured a significant gas supply agreement with Zhaoyuan Thermal Power Plant for the 2025-2026 heating season, planning to supply approximately 37 million cubic meters of natural gas. This project not only strengthens the company’s strategic relationship with the local government and enhances its corporate image but also ensures sustained growth in pipeline natural gas sales and profits, marking a pivotal step in the regional business development of the Group.